Coupang's Revenue Miss Shadows Earnings Beat: What Investors Need to Know

The release of Coupang’s (CPNG) Q1 2025 earnings report highlighted a familiar dilemma for investors: when does revenue growth outweigh profit beats? The South Korean e-commerce giant reported a GAAP EPS of $0.06, comfortably surpassing estimates by $0.01. Yet, shares fell 3.4% to $23.17 in after-hours trading as revenue of $7.91 billion fell short of the $8.06 billion consensus by $110 million. This divergence underscores a critical tension in the market’s priorities—and offers clues about Coupang’s path forward.

The Revenue Gap: A Closer Look

The $110 million revenue shortfall, while modest in absolute terms, represented a 1.9% miss against expectations. This gap, however, masks deeper concerns. Year-on-year revenue growth slowed to 11.2%, down from the 14.5% expansion in Q4 2024. Meanwhile, the company’s Active Customer Count rose 12% YoY, suggesting demand for its services remains strong. The issue? Customer spending per order. Average Revenue Per Buyer (ARPB) grew just 3.1% YoY—a significant deceleration from the 8.2% ARPB expansion in Q1 2024.

This slowdown hints at a potential shift in consumer behavior. With inflation easing and competition intensifying in South Korea’s e-commerce landscape, shoppers may be opting for cheaper alternatives or reducing discretionary spending. For Coupang, which relies on high-margin premium services like Coupang Worry-Free, this trend could limit its ability to sustain profitability.

Profitability Holds Steady, But Is That Enough?

While revenue disappointed, Coupang’s EBITDA beat the $560 million estimate by $10 million, reaching $570 million. Operating margins expanded to 7.2%, up from 6.8% in Q1 2024, reflecting disciplined cost management. These metrics align with the company’s long-term strategy of balancing growth with profitability.

Yet, the market’s reaction reveals a preference for top-line momentum. shows a sharp drop despite the EBITDA beat—a stark contrast to its year-to-date performance. Shares had surged 9.1% in 2025, outpacing the S&P 500’s 3.9% decline, suggesting investors had priced in optimism around a strong earnings season.

The Zacks Rank and the Road Ahead

The Zacks Rank’s Hold (#3) rating, assigned pre-earnings, underscores the mixed signals. Analysts likely factored in a high bar for revenue growth given Coupang’s prior momentum. Post-report, the focus shifts to management’s Q1 call commentary and future earnings revisions. If Coupang can stabilize ARPB growth or demonstrate renewed revenue acceleration in Q2, the stock’s dip could prove temporary.

However, risks remain. South Korea’s e-commerce market is nearing saturation, with competitors like Naver Shopping and eBay Korea aggressively targeting discounts. Coupang’s expansion into logistics and AI-driven personalized shopping (via features like Coupang Play) may offer long-term solutions, but execution is key.

Conclusion: A Stock at a Crossroads

Coupang’s Q1 results paint a company that’s profitable but struggling to reignite revenue growth. The stock’s 3.4% post-earnings drop reflects investor frustration with the revenue miss, even as profitability metrics hold firm. Key data points to watch:

• ARPB recovery: A return to mid-single-digit or higher growth would alleviate concerns about customer spending.
• Competitor dynamics: Naver Shopping’s Q1 GMV rose 18%, outpacing Coupang’s 11.2% revenue growth—a warning sign.
• EBITDA sustainability: Maintaining margins above 7% amid slowing revenue will test management’s discipline.

For now, the stock’s 9.1% YTD gain suggests a core of optimism remains. But unless Coupang can reconnect revenue growth with its market leadership narrative, the recent dip could signal a longer correction. Investors should monitor upcoming quarters closely—this is a story that’s far from over.